Sustainability is providing the gateway to the evolution of retailing and the technology is already available
According to the British Retail Consortium’s (BRC) Retail 2020 report, the retail industry is facing historically low sales growth and there are 40,000 fewer shops than there were in 2006. Market pressures have created an imperative to address falling shop prices brought about by competition from pure-play online retailers and new shopping paradigms. In response, high street retailers are looking to make every inch of their shop floors count and some have found hidden value in their shop ceilings.
The time is now for the retail sector to embrace sustainability initiatives that save energy, save money and set the stage for the future of shopping.
We’re starting to see businesses investigating the ways technology can help them to become greener. And although a wide gamut of solutions are emerging, some established technologies such as LED lighting could be a key part of the puzzle.
For example, Sainsbury’s Sustainability Plan sets ambitious targets to deliver strong commercial returns and reduce absolute carbon emissions by 30 percent compared to 2005 baseline levels. A vital component of this strategy was to work with Current by GE to initiate the UK’s largest LED retrofit project, installing 250,000 new light fixtures in 450 stores by 2020. The LED project alone will cut Sainsbury’s lighting energy consumption by 58 percent and reduce greenhouse gas emissions by 3.4 percent annually.
Lighting-related savings can also free up capital for retailers to invest in new digital technology that further increases energy efficiency and boosts productivity across an enterprise. A connected energy management application, for instance, can help aggregate and analyse energy usage and spend data across retail branches, office buildings and distribution centres. This can provide a window into system-wide trends and identify opportunities to further optimize an organization’s energy strategy.
Lighting the Future
The biggest paradigm shift in the transition to LED lighting for retailers is the understanding that in addition to balance sheet energy and cost savings, the LED infrastructure can become the backbone for innovative retail services that will drive incremental revenue gains and customer satisfaction. Retailers are creating intelligent lighting systems that help solve challenges ranging from space planning to inventory management.
Intelligent LED lighting can even provide insights to enhance the customer experience through applications such as in-store wayfinding, CRM data integration that enables customer-relevant promotional offers, and apps that help customers locate store associates for better customer service. When this is delivered by a cloud based software platform, retailers also have the option to create their own customised apps to serve their specific customers’ needs. The possibilities are limitless and the impact potentially profound.
Looking toward to the future, smart retailers will leverage these transformational technologies to respond to marketplace challenges.
Financing sustainable investments are traditionally a challenge but even here, there are ways for innovation to provide new opportunities. Attractive financing models are readily available that can remove the risk of sizeable capital expenditure and contribute valuable returns to the bottom line when they’re needed most. For Sainsbury’s, Current by GE provided a turnkey service, embedding financing from GE Capital Industrial Finance that applies energy savings against equipment throughout the entire three-year implementation timeline.
Although it is widely known that sustainability projects will eventually pay for themselves, board members looking to balance the books each year often find the “spend to save” mindset hard to swallow. However, when the outlay isn’t far removed from the benefits provided by the investment, it becomes much more palatable upfront.
The value paradigm of energy savings is rapidly evolving for the retail industry to a much wider objective to operate more efficiently. Empowered by smart connectivity and big data insights, LED lighting is becoming a versatile asset. It represents the ideal for many industries; the ability to save money and reduce energy consumption in the short term and prepare for future innovation in the long term. Sustainability is providing the gateway to the evolution of retailing and the technology is already available to give companies the upper hand.
Pete Lau is CEO for Europe, Middle East, Australia and Asia at GE’s energy start-up, Current, powered by GE and is steering an innovative new ‘digital engine for intelligent environments’ approach in the industry. Leading the company, he is focused on simplifying energy consumption through the marriage of intelligent software and hardware – exploiting the Industrial Internet to its fullest potential to increase efficiency, engagement, productivity and insight for customers.
With more than 15 years’ industry experience, Pete has a vast amount of customer insight and commercial knowledge to draw on in bringing Current’s unique, integrated solution to market. He has held a variety of leadership positions within GE – most recently, Pete served as General Manager of Global Sourcing and LED Fulfilment, where he built GE Lighting’s new partnership ecosystem and drove customer-centric business operations.
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